What is an NFT?
Updated: Apr 12, 2022
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Christopher H. Loo, MD-PhD: Welcome everybody to this week's podcast episode. And today we're gonna be talking all about NFT's. So I know a lot of people are interested in crypto, DeFi, NFT's. So today we have Dr. Taylor Brana, and I'll bring him onto this show and let him introduce himself. So Taylor, I know we are welcome.
Dr. Taylor Brana, DO: Thank you. Thank you, Chris. We've known each other for a little bit now. And it's great to speak to you as well. You've been on my podcast, The Happy Doc. And I've gotten to chat with you about entrepreneurship and finances and everything. And it's just been really great to know you. Yeah, I'm Taylor. I'm a psychiatrist. recently finished residency about let's see now, six, six or seven months ago. And so that's part of my life. So I'm an outpatient provider for psychiatry. I also have built a lot of podcasts. I'm happy to say that, through my personal podcast network, we've amassed more than a million downloads through that avenue. And continue to consult for podcasting and coaching. I also started getting involved with cryptocurrencies and specifically got really deep into NFT's, or non fungible tokens. I think it's a really exciting space and I'm looking forward to building and teaching people more so about NFT's specifically, I'd like to start to do more formal NFT consulting as well. So a lot of exciting stuff is happening. And yeah, that's a little bit about me.
Christopher H. Loo, MD-PhD: Awesome. I know. So I know a lot of people think they've heard of NFTs. So, the most common question I get is what is an NFT? And then also, it is just digital art, which you hear about in the media. So how did you get introduced to NFT's? Was it like a side hobby? or you took a course on it you read a book or just the idea and intrigued you. How did you get started?
Dr. Taylor Brana, DO: Yeah, so basically, in broad strokes, I think all of us are trying to find methods and ways to enhance, not just. I don't want to live a life where I'm living day to day and trying to just get by. I want to build a method or a way for me to enjoy the experience of life and finances and having that in order is one of those things. So my interest initially was because of cryptocurrency, I think cryptocurrency Bitcoin, Ethereum, Solana, all these different currencies are a method in which we can store value. And just like when we select an index or stock fund, or what have you, or real estate or business, we want to see our investments rise, and we want to invest in things that we believe in, or projects that we believe in, right?
So NFT's are just basically something, a token that lives on a blockchain. NFT means non fungible, that means you can't mess with it. You can't tear it up, you can't destroy it. And token, non fungible token, it's a digital token that lives on top of a blockchain like Ethereum or Solana or Avalanche. And how I got interested in it was, I saw it as a very interesting avenue of mixing culture, finance, a little bit of gambling, art, and creativity all into one space, on top of an already existing cryptocurrency space that's happening, I saw a huge opportunity for this to not just potentially be something that's financially lucrative, but something that I think is a technology that's here to stay in a lot of ways. And it's not just an art piece, we'll get to that in a second. A lot of people are like oh, I right clicked this, and I saved it. It's a JPEG. And a lot of people think that's the point. And I do want to debunk that as well. But yeah, it's not just about the art.
Christopher H. Loo, MD-PhD: And you made a very interesting point with NFT's. And so what is the value? Why is it so significant? Because people really don't really understand the significance of tokenization. And scarcity and authenticity. So describe why NFT is so significant. And there are still people in my circle that can’t grasp it.
Dr. Taylor Brana, DO: Yeah, absolutely. So let me give you a quick example of this. Imagine you have a deed to your house. And that deed is specifically on paper, right? If, for some reason, that deed gets damaged, or is not able to be verified, and again, I'm not a real estate person. So Chris, this might be something that you have to correct me on. That deed could be lost, there's going to have to be different verification methods that are sort of gone through in order for that deed, or piece of paper that's verified to essentially verify your ownership right?
Once a token is produced, and it's verified by a collection or specific group, it lives there forever. The way that blockchain technology is set up, there is a consensus ledger that is verified by multiple sources across the chain, that basically it is impossible to mess with this thing. So once this thing is produced on the blockchain, it's living there. And it is verified. And it's this token. So coming back to the house example, if you can have a digital deed, that is a token that verifies your ownership in this thing. That's not that's not gonna be tampered with, it's not going to be messed with, it's going to be in your specific wallet or holdings. And that's going to be the verified source, as opposed to something physical. It goes beyond that, but that's like an example of the power of this specific token if that makes sense.
Christopher H. Loo, MD-PhD: Yeah, it's so amazing, because it started in the arts but it's also going into music and now it's with the NFL, and sports and gaming. It's so fascinating, because for example, our identity or driver's license, passport, COVID vaccinations, that can all be represented as a single token, and that way, you just show it on your cell phone, and you don't have to go through all these different bureaus. So it's really efficient, makes everything more efficient and streamlined and eventually everything's going to get tokenized.
Dr. Taylor Brana, DO: I could imagine a future where, for example, you have a token that lets you enter your own home, you could have a token that lets you enter your car. This type of technology is in its infancy in terms of application. I think it's just starting. I don't think it's going anywhere in terms of technology and the future.
Christopher H. Loo, MD-PhD: And then you mentioned NFTs combine culture. So describe some of the examples where NFT's are used, especially the value of community and if you hold an NFT, you actually have ownership in stake in that artist and creator. So you don't need to own stocks anymore. So describe that.
Dr. Taylor Brana, DO: Yeah, so let's use the obvious example, which is Board Ape Yacht Club, which is well known. That current token is owned by Justin Bieber, Steph Curry, in the NBA. Jimmy Fallon, Eminem, it is infused in culture. The reason why that became popular was essentially they built a token with the premise that these token holders will get specific access to exclusive parties, yacht parties, and created a network of high value and high net worth and high celebrity. So this is an example where the Board Ape itself, the picture actually holds very little value, it has nothing to do with the art, it has to do with holding the token, which the token gives you access to an exclusive group. One of the things a lot of people don't understand is when you create an NFT, you can create token gated opportunities, meaning, I only get access to a specific chat, or group or digital space, or physical space, because I hold that specific token.
So I use the analogy that your token is not an art piece, your token is an Access Pass. It's like a gym membership specific to your community or group. With culture, when you think about products, or things that are produced, and how culture essentially creates hierarchies in society, hierarchies are created and built through separation through exclusivity. If you look back to ancient communities, if you were part of a tribe, your tribe was exclusive in comparison to another tribe, right? You have your own flag, you have your own brand, you have your own family emblem, you have your own family crest, these tokens are the modern version of essentially creating exclusive access. And the Board Apes are an example of a celebrity or high value access through the token, if that makes sense.
Christopher H. Loo, MD-PhD: Yeah. So it's not just the value of the digital artists, the collective membership, it's what you described, the exclusivity, the access to the perks. So it's almost actually a key; a digital key allows you membership, and the full benefits that come with that.
Dr. Taylor Brana, DO: For example, really quick. I just want to give you another example, Gary Vaynerchuk, who just came out with not too long a NFT called Fly Fish. Fly Fish is a token gated restaurant in New York, you will only get access to the restaurant, through having a Fly Fish token to get access to those sushi and Japanese restaurants.
Christopher H. Loo, MD-PhD: Yeah, that's almost the equivalent, because I know a couple of my friends, they had memberships at the local country club, and then you can actually flip it and transfer their membership over. So in that sense it's almost like an NFT, except it's not digital. So it's so fascinating to see the trends because it's like social media was like the biggest trend, and now it's gone to like crypto and NFT's, just how everything is evolving.
Dr. Taylor Brana, DO: Chris, I want to add something to the example you gave with a country club. Imagine you're a country club member, and you have a digital token that lets you do that. But if at any point, you're dissatisfied, or you don't see yourself using that token anymore, at a country club or if you just feel like you would gain more value from giving it to someone else, you can buy, flip, sell, trade, your membership for that country club. So you can profit off of your membership. It's like getting a token that gives you access to LA Fitness but later you can resell your card for more money. Right? So not only do you get access to stuff, but it's a potential. It's a potential, I'm not saying it is, it's a potential investment opportunity to flip or grow money through your access in your membership to that community.
Christopher H. Loo, MD-PhD: So there's more than one utility for owning an NFT. It's the ownership, it's the community, it's the access and it's such a fascinating concept. And I know a lot of people are wondering. a couple my friends last year, they made six figure profits flipping NFT's. I know you're doing it. So describe some of the ways you can monetize this trend.
Dr. Taylor Brana, DO: Yeah. So I got in really early in the beginning, I was Oh, let me just try this out. So I started doing my research hopping onto Twitter. A lot of people use Discord. Yeah, usually between Twitter and Discord, and then a lot of YouTube videos, honestly, just different people that are in the space right now talking about projects they're excited about. And I learned all the basics, I learned everything that you have to do in order to go from US dollars to converting to cryptocurrency to converting it to an NFT. It's a process.I minted multiple different projects. Minting means starting at the beginning, and getting the first token at the base, before it's launched. I started playing around with that, and I really took close attention to the economics around what was getting people excited, what were the markers of if a project was going to do well or not, I really paid attention. I looked at it as a chance to really study human psychology and behavior, because I'm trying to gain advantages to grow myself, right, as we all are, in a way.
And what I learned from that experience is there are definitely key indicators of things that are more than likely to grow versus not. And to answer your original question, how did I get started and enter that process? I just dove in, I immersed myself. And from immersion, I was able to essentially learn that I can purchase specific NFT's at the base price. And I can flip them for 5, 10, 20x. If I'm finding the right indicators. For example, one of them I'm literally looking at my desktop, I can see some of the NFT's I've collected. One of the examples is one of my Shiboshi’s. I got a Shiboshi, which is a Shiba Inu NFT. I purchased it. I had a feeling it was going to do well because Shiba Inu coin has a lot of excitement in that community. So I got that at point two Ethereum. And I was able to flip it for 3.1 Ethereum. So if you do the math, that's about 15x. So yeah, that's an example of something I put in maybe 3-600 at the time and then flipped it. At the time when I sold it was around 10 grand plus? So in what other areas of finance can you 10-15x, aside from gambling, except with way less risk?
Christopher H. Loo, MD-PhD: I mean, you can’t. It's like crypto, NFTs. blockchain has the largest upside asymmetric risk reward potential compared to any other assets. So that's why, but it's just so fascinating, because it's just so cool. I love hearing stories, where people are just playing around and just trying to learn the technology and then they find a strategy or a way of making it. back in 2012 I was just buying Bitcoin just to collect it just like a baseball card but now it's so cool to people who like tinkering around with digital toys and coming up with inventive solutions such as yours.
Dr. Taylor Brana, DO: oh, absolutely. And I want to, I want to say I want to be very clear, this space is very early. So just like the internet, boom, you're gonna have scammers, you're gonna have security issues you're gonna have, it's the Wild West. So you're gonna have simultaneously the most exciting profits and opportunities. And at the same time, there are security things to think about. There are potential scammers. That's why it's important to talk to someone like me, who, I will tell you with 100% authenticity. I am the type of guy that can educate in a way that I can, I can tell people what to look out for in terms of scamming and security issues. And at the same time, I can provide insight in terms of indicators to look at.
At the end of the day, anything you do in the space, you have to do your own research, and you have to take your own risks. But, you want to have the right people in place, I call it an alpha group, I have my own Alpha group, you want to have the right group in place to check authenticity, you want to reach a consensus with your group. So you're making good decisions. If you do this on your own. It can be tough to have enough information to know what to do. So it's very important that the information you're receiving in space is also accurate. And good decision making principles. And considerations are taken into account.
Christopher H. Loo, MD-PhD: So I know a lot of people, they're like oh, they've listened to this up to this now. And they're Oh, how do I get started? Or we'll, briefly just warn people of some of them because I know there's a lot of scammers out there. I get like all these weird texts and all of this. So, what are some red flags, just broad strokes?
Dr. Taylor Brana, DO: Red flags for NFT's? So, just like when you're getting a good business, you want to see that the team is doxxed, meaning that their identities are revealed. If they're not, they could hide behind that and try to scam you. When a team is launching a project, there's actually ways to check their smart contract. The smart contract is what they build. It's basically a technology they build their token on. You want to have someone ideally take a look at the contract to make sure there's nothing fishy in the technology or the programming. You want to see their Discord, Discord is where everyone lives with NFT's. You want to see that there's a lot of people excited about the project in the Discord. A lot of people use Twitter spaces, you want to be able to hop into conversations to speak to the founding team, or at least be able to speak to founding members or moderators about the project. You want to be able to feel comfortable having transparency in terms of, communicating and asking questions like What is the price? What are the goals of this project?
Every project needs to have a roadmap, a roadmap is essentially what are the goals of the project, every project needs to have moderators in the Discord, essentially managing expectations and discussing things. Every team needs to have not just strong art, but a strong community with a strong vision, ideally a transparency about where funds are going, in advance. The higher the level of transparency and communication from a team, the more you can feel confidence they're going to execute well. With that being said, it's still possible a rug pool can happen. A rug pool is the term for when you buy into a project. And then they take the proceeds and never execute on what they said. Imagine having an investment in, I don't know a stock or something into a company like Tesla, and then all of a sudden Elon Musk stops executing. So yeah, that happens.
And so you have to really do your due diligence in terms of speaking to people, hopping in, vetting out the team, ideally, hearing them speak and seeing where the roadmap is heading. And ideally, it's best to invest in projects, where there's already a little bit of execution. For someone who wants to put in more money. It's better to put your finances into teams that are already executing. If you're joining at the ground level, you do get the benefit of having the highest potential gain. But the thing to be nervous about is yeah, there's a lot of upside. But if the team hasn't executed, you don't have the reassurance. So there's levels to this game. And I can't flush it out completely for everyone, but there are levels to consider. And depending on your level of risk tolerance, there's different ways to play it. For more established blue chip projects, you can probably be rest assured they're going to grow. But for projects that are just starting or are on in the earlier phase, you're taking a higher level of risk. And as such, your risk tolerance has to be higher, and you have to be ready to essentially lose your entire investment. I've lost my entire investment or money I've put into specific projects. And I've also made huge, ridiculous gains on other projects. So it just depends on your risk tolerance and what you're willing to take in terms of risk.
Christopher H. Loo, MD-PhD: Yeah, don't lose more than you can afford. And I know, and I know, besides speculating on NFT's you're also minting your own NFTs. So tell us more about that. It's so fascinating. How are you gonna do that?
Dr. Taylor Brana, DO: So I got super excited about the projects to the point that I was like, I need to get my hands on this, I need to do this. So we created the Shell Shakaz NFT. Shell Shakaz is a turtle NFT. We have 8888 Radical turtles. But long story short, the way we're doing it is different. We are launching in batches. So instead of launching 10,000 of these pieces, we're only launching small batches at a time. Our first drop, which is happening at the time of us recording, is 222 turtles. And once we receive the funds for that, we're going to be executing on our roadmap so people can already start to see, we're following up on the plans we made. We're creating a very organic, authentic community. It's not a big pump and dump, we’re not doing huge marketing. Every person in the team or in our Discord membership, which right now is around 600. Each of those people are people we've hand picked, we've pitched to those individuals in Twitter spaces, they've come in organically. So that gives us some more reassurance that it's an organic growth over time. I get very concerned about projects when they do a huge marketing campaign. They get 10 to 20,000 people in their Discord, it creates a huge pump, and then a ginormous drop later. So our approach is different. We're turtles, we're slow and steady. We're giving a percentage of our profits and proceeds to non Nonprofits and Charities that our community is going to vote on. We're creating additional utility through additional and NFTs that you receive through the project. We already have merchandise that's been created, essentially through the collection. We have a development team that allows us to do really interesting things like staking, breeding, mutating, or evolving the NFT. It creates a gamified experience through that. So it's really cool. Yeah, but long story short, the technology. Plus, the utility of having a community allows us to then use those funds to execute a really cool idea. So yeah, it's exciting. We love it. And yeah, that's a little bit about the collection.
Christopher H. Loo, MD-PhD: Yeah, I'm so pumped with all the creativity and the other day I was on YouTube, and I was watching Steve Aoki. He's a DJ out of Las Vegas. And he said, he made more in NFT's last year than he did out of 10 years combined of DJing. and, yeah, it's just, that's amazing. It's incredible, just the leverage and the scale. And he actually showed a video where he's mutating his NFT. I think it was a Board Ape. That was so cool. And that's how you get the value. And people find that cool and interesting.
Dr. Taylor Brana, DO: So imagine you have a one out of 10,000 stake in a company. But on top of that, the stake or the piece that you own, can evolve and grow and create more dividends or tokens over time. And if that company is successful, that's gonna essentially raise the stock value, right? That's what tokens do. But on a brand cultural level that is much more innate to human psychology. I look at tokens as like the new kind of stock market 2.0 or 3.0. It is a high risk, high on risk assets. But it comes with the human psychology aspect, which creates a lot of interesting dynamics. And I think it's going to evolve and change over time, but I can say, certainly the technology and the tokenization and all that stuff. It's here to stay for sure.
Christopher H. Loo, MD-PhD: Yeah. So I know the final words. I know people, a lot of people are going to be interested. How can they contact you to find out more about you, join in that project? How can they contact you?
Dr. Taylor Brana, DO: Yeah, I think the best way for your community is honestly just to friend me on Facebook. It's Taylor Brana, I'm not hiding. You can also email me. The email will be email@example.com. If you want to get in contact directly. The easiest way, because again, I'm looking to speak to real people that want to learn. And ideally speaking, I would like to offer consultation to people if they really want to learn this stuff. So those would be the best methods. And long term, look, I'm looking to build my own network and community of people that want to get their hands and get their hands on and understand this stuff. Because I truly do think NFTs are a bonus application and utility you can add on to any, any single brand, any company, anything that you do, you can create an NFT to create a brand new experience that wasn't possible before.
Christopher H. Loo, MD-PhD: Yeah, I know, I've actually talked to a lot of people that have very, equity investors in the past. And now they're completely tokenized, they're just looking at completely tokens like NFT's, crypto, they're not even worried about the stock market, they're just focused on. So that's just tokenization; you don't even have to be accredited. You can just go direct, you get democratization, access everything. So, it's a fascinating, wonderful discussion of the technology behind it.
Dr. Taylor Brana, DO: It completely removes the middleman. And honestly, by the way, speaking of medicine, it could change healthcare, and in a lot of ways in the future. Not to get down the rabbit hole too quickly, because I know we're closing out. But imagine a practice where you and your patients have a token, and proceeds that are accrued through patient interactions, actually go back to the token, so your patients can make money off of visiting you.
Christopher H. Loo, MD-PhD: Wow, yeah, I know, all the insurance, all the reimbursement models, even like virtual care pharmacies. This has the potential to change the course.
Dr. Taylor Brana, DO: Right now, I could get a room somewhere for a private little practice. I'm a psychiatrist, so it's easier for me. I understand every specialty has its own difficulties. But I could get a room somewhere, I could create a token holding opportunity that by receiving that token, I will give X percent of my royalties back to my patients. And by accruing patients and opportunities through that business over time, I can incentivize all of my patients to gain royalties through the business, I'm not saying I would do that. And, or, I could incentivize it by giving them that token, and then proceeds allow me to, for example, allow a patient free care, let's say there's certain individuals who can't come in or can't pay well, we have a little fun that's accruing over time through the token. So anyways, there's a lot of interesting utilities and ideas that can be applied to any space.
Christopher H. Loo, MD-PhD: Fascinating. We're gonna have to have another discussion. I just submitted a KevinMD article, trying to synthesize all the developments. So keep in touch, and because the space continues to change at an exponential pace.
Dr. Taylor Brana, DO: Oh, yeah, man, I'm in the trenches. Trust me. We didn't even didn't even talk about all the fires I've had to put out. But, yeah, I'm in the trenches. And trust me, I thought I knew I thought I knew stuff. And every day, I'm still intensely learning. So, it is just starting.
Christopher H. Loo, MD-PhD: Yeah. Awesome. Well, thanks so much, and we look forward to having you on in the future.
Dr. Taylor Brana, DO: Thank you so much. I'll see you next time.
Christopher H. Loo, MD-PhD: Many thanks again for being here. If you’re new, you can find me online at Christopher H. Loo, MD-PhD, where I have links to other episodes or links to online resources that will support you on your financial literacy journey. I’ll see you there in on next week’s show. While I bring you thoroughly vetted information on this show regarding a variety of financial topics, I cannot promise you a one size fits all solution. This is why I caution you to continue to learn. Educate yourself and seek professional advice unique to your situation. If you want to talk to me, I welcome it. Please reach out via my website or email at Chris@drchrisloomdphd.com. I read and personally respond to all of my emails. Talk soon!
Editor's note: This transcript has been edited for brevity and clarity.